It's hard to imagine two executives who are less alike. Daewoo Motor Co. founder Kim Woo Choong was a classic entrepreneur, a former shirt salesman who launched Daewoo group with $10,000 and six employees. He worked seven days a week, acted like a tyrant and enjoyed displays of wealth while burdening Daewoo with a load of debt.
His court-appointed successor - Lee Jong Dae - likes to play the accordion. He is a former newspaper publisher and economist who never sought to be Daewoo's chairman. He cultivates consensus and is courteous to subordinates.
At a time when Daewoo desperately needs a buyer - most likely General Motors - Lee seems to be best suited for the job. Kim loved growth, borrowing heavily to build a network of assembly plants in such places as Vietnam, Iran and Poland. But if Daewoo is to survive, it must shrink dramatically. In his seven months on the job, Lee has laid off a third of the work force, cut payments to suppliers and vowed to sell overseas assembly plants.
Lee does not have to go far to see evidence of his cost-cutting effort. Stepping out of his office on the 12th floor of Daewoo Motor's headquarters in central Seoul, Lee can walk through vast, empty spaces that once were jammed with hundreds of desks and people. Entire departments have vanished, leaving not so much as a chair or wastebasket to mark their demise. At least 6,000 employees have left.
Since entering bankruptcy court protection in November, Daewoo has been losing money and people. The company's rapid decline has increased the pressure on General Motors to announce its bid to purchase the South Korean carmaker soon, before Daewoo runs out of money.
Appointed by a bankruptcy court, Lee is a former chairman of Kia Motors Corp. Some observers dismissed him as a caretaker whose job is to prepare Daewoo for an eventual takeover by General Motors. But Lee's task was extraordinarily difficult. He had to retain the loyalty of workers whose jobs were at risk, while reassuring nervous creditors. Meanwhile, he had to maintain relations with GM - the sole bidder - and mollify South Korea's government, which would suffer a huge political liability if Daewoo fails.
'Once I decided to take the job, I couldn't grasp the whole picture,' he says. 'I couldn't have imagined the problems, especially of the overseas business units. The business was huge, and so were the problems.'
Lee's office is simple and barely furnished. The furnishings are standard for Daewoo executives, neither ornate nor modest. There are no family photographs and no evidence of a personal touch. It is suggestive of a man who has not unpacked - one who is reluctant to settle in because of the uncertainty over his tenure.
His career is not typical of an automotive executive. After studying German at Seoul National University, the country's most prestigious university, he earned a graduate degree in economics. Later, he worked as a business reporter for Dong-A Ilbo, a leading Seoul daily newspaper. He later pursued his doctorate in economics at the University of Hawaii. After he earned his degree in 1986, he was recruited by Kia to run the new Kia Economic Research Institute.
Lee did not campaign for his job. After Hyundai's takeover of Kia, Lee returned to his old love - publishing. After two years as publisher of a major Seoul newspaper, he got a call from the Korea Development Bank. The bank told him he was its choice for the chairmanship of Daewoo.
Lee could not resist. 'Do you believe in fate?' asks Lee rhetorically. 'I had no idea that one day I would be sitting here, the head of Daewoo.'
Perhaps because of his background, Lee is more open-minded than many Korean executives who adopt a brusque style with subordinates.
'He's a nice guy. Very fair and good-natured, perhaps to a fault,' says Lee Yong Eun, a former Kia senior manager who reported to Lee. 'But at the same time, he can be quite the bureaucrat and walks the fence rather than taking sides.'
During his years at Kia's research institute, Lee frequently accompanied Kia Chairman Kim Soon Hong on business trips. That gave him an opportunity to meet auto executives on six continents.
Lee gets praise for his political judgment and 'people' skills. But some observers question whether he has sufficient management skills and deal-making experience.
Despite his eagerness to take the job, the past six months have not been easy. Lee has been painfully aware that Daewoo had little clout in its bargaining with GM. To gain leverage, he tried to create a survival plan if talks with GM collapsed. 'The sudden decision last year by Ford to pull out of the bidding for Daewoo was a major embarrassment,' Lee says.
Lee declines to discuss his contingency plan. If GM fails to buy Daewoo, it seems likely that he would arrange a takeover by institutional investors or a consortium of companies. The new owner could ask creditors to accept equity as payment for Daewoo's debts, form a new management team and shrink the company. If a downsized Daewoo can stabilize sales, it could fetch a higher price in a year or two.
After Lee took over in November, he eliminated 6,000 jobs and cut suppliers' prices more than 5 percent. After slashing overhead expenses, Daewoo has nearly balanced its cash flow. Lee says the company will be able to cover wages and pay suppliers for components. Lee hopes to achieve positive cash flow in July or August, which would ease its dependence on the banks. That assumes Daewoo would not repay its debts. But it would give Daewoo more leverage in negotiations with GM.
'If Daewoo has other options and GM realizes this, they would take a different attitude,' says Mark Barclay of Samsung Securities in Seoul.
In fact, Daewoo has little room to maneuver. Its cost-cutting campaign already has generated deep unrest among workers, and the shutdown of Daewoo's Pupyong plant - an additional cost-cutting measure recommended by a consultant - could tear it apart. It is not hard to find out why.
Inside the compound of Sangok-Dong Cathedral a few blocks from Daewoo's sprawling Pupyong assembly plant, the remnants of the automaker's union leadership plan their resistance to a GM takeover. Cut off from supporters by police ringing the Roman Catholic church, 17 union leaders and their families live and work in a shabby collection of tents and shelters in the interior courtyard. The rebels are protected from arrest only by the Catholic Church's tradition of sanctuary.
Inside the tents, fax machines, video equipment, bedding and cooking utensils vie for space. Union aides, each wearing the traditional blood-red headband of protest, talk into cellular phones or attend fax machines as they go about the business of winning support from the outside world. In a corner of the compound between the tents and a statue of the Virgin Mary, about 10 women - wives of the strikers - squat and compare notes on their children's school work.
This is the home of people who have nowhere else to go and little left to lose. But it also has become the center of growing opposition to the takeover of Daewoo by a foreign company.
'We are dead set against any foreign company, including GM, taking over Daewoo Motor,' Daewoo union President Kim Il Sop said in an interview May 2. 'You can deliver this message to (GM Chairman) Jack Smith: `Suit yourself, Mr. Smith. Take over this company. But you'll regret it.' '
Kim bitterly claims the government and banks punished workers for crimes committed by Daewoo's former management. He alleges that Daewoo founder and former Chairman Kim Woo Choong looted the company of at least $19 billion - ruining the company. Indeed, Kim is a fugitive from federal corruption charges that allege much the same. Because the creditors' largest shareholder is the Korean government, he blames the government for promoting the sale of Daewoo. 'This war will never end unless the government gives up these plans to sell Daewoo for nothing,' he vowed. 'Foreign countries are out to take control of our country's economy.'
Kim's militant union has long opposed the sale of Daewoo on the assumption that a buyer would close the aging Pupyong plant. In one way or another, that plant feeds one in every five of Inchon's 2.6 million residents. Because of that dependence, workers laid off in this working-class city have far fewer job options than those in more economically robust regions of Korea.
'They've got nothing to lose,' Samsung Securities auto analyst Barclay said of the Pupyong workers. 'If I were in their shoes, I'd be out there with my steel pipes, too.'
But the business case for closing Pupyong seems clear. It is the largest, oldest and least productive of Daewoo's assembly plants, operating at less than 40 percent of its rated capacity of 500,000 mid-sized cars a year. One reason for its low efficiency is its location in the center of Inchon, which makes it difficult for suppliers to deliver parts.
Angered by ordered layoffs, workers in the last week of February occupied the Pupyong plant buildings and barricaded themselves behind cars and other equipment. Riot police eventually dislodged them in a series of violent running battles with workers, students and other activists. Management then stopped the pay of striking workers and evicted many of them and their families from their company-owned apartments.
On April 11, the union organized another protest. Hundreds of Daewoo workers sat down in the street outside the plant, many with their shirts off to show they were not concealing any weapons. After a three-hour standoff, riot police charged. Many workers fled, but film footage of the protest shows police beating the remaining protesters with truncheons, even though none of the workers fought back. More than 100 protesters were taken to the police station, while another 67 were taken to the hospital. Arrest warrants were issued for union leaders.
Until then, Korean public opinion had supported efforts to sell Daewoo. But television coverage of the police violence caused nationwide revulsion. Rejecting a call by members of the National Assembly to fire the chief of the national police, Korean President Kim Dae Jung instead fired the head of the Inchon police. With Korea's upcoming elections in mind, he also expressed regret over the police activity.
But the actions have not diminished the nation's anger, analysts say. 'The Korean people supported restructuring,' says Cho Yong Jun, research manager at Shinyoung Securities. 'But the recent violent putdown has reversed public opinion in the wrong direction, worsening opinion toward the government and creditors.'
Meanwhile, the union offered Daewoo a rescue plan based on a successful job-saving program negotiated by Volkswagen AG with its unions in the 1990s. Daewoo's management rejected the offer, he says. 'We wanted to let all people know our commitment to saving this company by sacrificing our pay, but management didn't allow this,' he says.
The union's standoff with the police has complicated Lee's efforts to maintain labor peace. 'I'm ready to negotiate with the leadership,' he said. 'But I can't because they are wanted by the police for illegal strikes and are in hiding. We have informal contact nonetheless. There are divisions within the union, and a significant number of the rank and file want new leadership. It's the most challenging aspect of the job.'
Considering the pressures he faces with angry union leaders, it is a miracle of sorts that Lee has maintained his sense of humor. When he is not tending to Daewoo business, he plays his accordion. Every morning before he sets out for work and every evening when he returns, he practices for 30 minutes. 'It's the best part of my day,' he says with a smile.
The hobby is a new one, started only a few years ago. His enthusiasm for The Blue Danube and La Cucaracha is not shared by other members of the Lee household. 'It drives my wife crazy,' Lee confesses.
When finished with his current job, what will Lee do?
'I'd like to enroll in the accordion performance program at the University of Colorado,' he jokes. 'Maybe get a part-time job playing in some beer house.'